Federal
Lifetime and annual dollar limits for participants in individual plans as well as self-insured and fully-insured groups, including grandfathered plans, are prohibited for essential health benefits.
Since network and non-network is not differentiated in the law, the prohibition applies regardless of how benefits are delivered. The limit does not apply to day, visit or per procedure limits. The regulations clarify that an exclusion of all benefits for a condition is not considered to be a lifetime or annual dollar limit. However, if any benefit is provided for a condition, the annual and lifetime prohibitions apply. Please note, grandfathered individual plans may still impose annual limits.
Limits are not applicable to:
- Health Flexible Spending Accounts (FSA)
- Medicare Medical Savings Accounts (MSA)
- Health Savings Accounts (HSA)
- Integrated Health Reimbursement Accounts (HRA) coupled with a medical plan, retiree-only plans*
- HIPAA excepted benefits (limited scope dental, vision, disease only, fixed
indemnity and supplemental plans)
*Application to Retiree Plans: If a plan covers less than two participants who are active employees (including some retiree-only coverage, depending on how the plan is structured), the rules prohibiting limits do not apply. The key issue is often a factual one as to whether the plan is structured so that it does not cover two or more active employees. It does not matter if a retiree is an early retiree or is age 65 or older. For more information, visit EBSA’s FAQs about Implementing the Affordable Care Act – Part III.
As a result of this provision, standalone HRAs will not be permitted. However, with the 21st Century Cures Act QSEHRAs (Qualified Small Employer HRAs for Non-ALEs) are permitted.
Rules for individuals who previously reached a lifetime limit:
Individuals who reached a lifetime limit before the prohibition became effective and who are otherwise still eligible under the plan must be given a written notice that the lifetime limit no longer applies.
If they are no longer enrolled, they must be provided a written notice informing them of an enrollment opportunity that must continue for at least 30 days. Individuals eligible for this enrollment opportunity must be treated as special enrollees (i.e., they must be given the right to enroll in all of the benefit packages available to similarly situated individuals upon initial enrollment).